Is union membership a bad deal for workers?

Commentary: Obama, unions and the anti-business agenda

An earlier version of this column misspelled the last name of the president of the AFL-CIO. It has been corrected.

Reuters

Chrysler Group assembly workers lower the frame onto the chassis for Chrysler Jeeps.

WASHINGTON (MarketWatch) — President Obama is a favorite among organized labor. So it’s surprising that next Wednesday the Labor Department will publish data for 2012 showing that during Obama’s first term, the U.S. unionization rate for American workers declined faster than during two terms of President George W. Bush.

Who would have guessed?

President Obama’s first term has been a disaster for jobs. There are only 460,000 more nonfarm payroll jobs today than when he took office.

Hollywood's surprising new power elite

(3:11)

Megan Ellison, the 26-year-old daughter of Oracle Chief Executive Larry Ellison, is part of a new crop of young, deep-pocketed Hollywood financiers who are changing the way movies get made today.

As the economy grew over the past year, the total unionization rate declined from 11.8% of wage and salary workers in 2011 to 11.2% in 2012. The private sector unionization rate fell from 6.9% to 6.6%, and the government unionization rate dropped from 37% to 35.9%.

The latest data continue a trend of steadily declining union membership over the past 30 years. Yet during Obama’s first term, the decline in union membership has accelerated. The unionization rate declined by 1.2 percentage points, compared to 1.1 percentage points during the eight Bush years. Public sector unionization rates fell by nine-tenths of a percentage point during Obama’s tenure, compared with seven-tenths of a percentage point during Bush’s two terms.

No matter how pro-union a president, an anti-business agenda results in lost jobs for non-union workers and union members alike. While Obama has championed union causes, his tax and regulatory policies have systematically discouraged business investment and job creation in America. Our corporate tax rates are among the highest in the industrialized world, and burdensome and inefficient regulations add to the cost of production and render every employee a walking liability. Consumer confidence has been low, resulting in lower consumption, which also affects employment.

President Obama seemed to do everything he could in his first term to help unions. Much of the $831 billion stimulus package was directed at unionized workers, either in the public sector, such as teachers, police officers, and firefighters, or private sector construction workers who got stimulus funds for “shovel ready jobs” that, as it turned out, weren’t so shovel ready. Obama’s Executive Order 13502, on project labor agreements, required construction projects over $25 million receiving federal funds to hire unionized workers.

Obama supported the misnamed Employee Free Choice Act, which would have taken away worker’s rights to a secret ballot in elections for union representation, and imposed mandatory binding arbitration on employers and workers who could not agree on a contract. The Employee Free Choice Act was so far outside the mainstream that did not even pass the Democratic-controlled Congress during the first two years of Obama’s presidency — even though for the first year the Senate had 60 Democratic senators.

Obama “recess-appointed” three members of the National Labor Relations Board when the Senate was not even in recess. One member, Richard Griffin, has been accused in a lawsuit of using threats and extortion to cover up embezzlement of union funds when he was general counsel for Local 501 of the International Union of Operating Engineers in Los Angeles.

The NLRB’s acting general counsel, Lafe Solomon, investigated Boeing for opening a plant to build Dreamliner aircraft in South Carolina rather than in Washington State, the site of an existing plant. (The case was dropped after the Machinists’ union settled with Boeing.)

The NLRB issued two rules later overturned by the courts. One required employers to post a notice informing workers of the right to unionize (but not the right to decertify a union). The other would have reduced the time for a workplace election for union representation from an average of 38 days to an average of 15 days after the union filed a petition, leaving little time for the employer to communicate with the employees about unionization issues.

How will markets handle debt Ceiling debate?

Labor Secretary Hilda Solis, the daughter of union activists, rolled back four union financial transparency rules put in place by Bush Labor Secretary Elaine L. Chao. These rules were designed to inform union members what the union was doing with their dues, just as shareholders have the right to corporate transparency.

Under Bush administration rules, unions were required to disclose officers’ benefits, such as union contributions to health and retirement plans, in addition to wages and salaries. Second, they were required to verify that sales and purchases of assets were performed without conflicts of interest, rather than to interested parties at distorted prices. Third, unions were required to disclose the finances of union-managed trusts, such as credit unions, strike funds, pension and welfare plans, and building funds. Finally, union officers had to complete Form LM-30, which required disclosure of conflicts of interest.

Solis rolled back all these disclosure rules on the grounds that “comments received indicate that the Department may have underestimated the increased burden that the rule would place on reporting organizations.”

Obama’s efforts to help unions by giving them more power have not succeeded in increasing union membership. Rather, union membership has declined even faster.

Growing sectors of the economy now are those that are non-unionized. It’s the unionized auto companies in Michigan, General Motors and Chrysler, that needed bailouts, not the non-unionized foreign auto companies in the South, such as Honda, Nissan, BMW, and Mercedes.

Right-to-work states, where workers do not have to pay dues to a union as a condition of working, have created more jobs than forced unionization states. Over the past 25 years, the 22 right-to-work states (i.e. not including the newly right-to-work states Indiana and Michigan) created 1.5 times as many jobs as the forced unionization states.

Without membership votes, union bosses funneled hundreds of millions of hard-earned American worker dollars into the campaign coffers of the Obama campaigns in 2008 and 2012. Reports filed with the Labor Department showed that the AFL-CIO spent $45 million on political activities and lobbying in 2012. The Service Employees International spent $54 million in 2011 (latest year available).

Union bosses pay themselves substantial salaries out of union dues. Just two examples — in 2012 Newton Jones, president of the Boilermakers, earned $729,000 a year in compensation, according to reports filed with the Labor Department. Richard Trumka, president of the AFL-CIO, got $302,000 a year.

Union bosses may be doing better under President Obama, but rank-and-file union members are not. That’s why, as the data will show next week, workers aren’t punching the union ticket.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.